David Allison (DA): We thought we'd start talking about your family. Tell me some of the qualities that you attribute to your family that later shaped your career at Microsoft.
Bill Gates (BG): My dad was a lawyer and my mom was very involved in business activities as a board member in non-profit organizations like running United Way Campaigns. She was the Director of the University of Washington, banks, that kind of thing. They shared what they were doing out in the world with my older sister and I as we were growing up. So, we always had a sense of, "Okay, this is the Governor coming to dinner, or here is this political campaign, let's get involved in this." I was a page down in the State Capitol of Olympia, Washington. Then I went out and spent some time being a page back in Washington, DC. I understood about contracts and things. I was interested in the business world, reading about it all the time. Sort of always playing around with the idea of "What would I end up eventually doing?"
DA: Were other of your contemporaries equally interested in the business, or did you find yourself unusual among the groups?
BG: Well, when I went to Lakeside School, I was about 12 years old. I started there in seventh grade. That was kind of a change for me. It is a private boys' school. Very strict. At first I really didn't like the environment. I did eventually find some friends there, some of who had the same sort of interest, like reading business magazines and Fortune. We were always creating funny company names and having people send us their product literature[laughs]. Trying to think about how business worked. And in particular, looking at computer companies and what was going on with them.
DA: What companies, in particular, did you like to follow?
BG: The first computer we used was a GE time-sharing system. It was connected over a phone line. Actually, the school couldn't afford a full phone line, so someone in the offices had a switch where you could take over the phone line. It was an ASR-33 Teletype with paper tape connected up to a GE computer. But, very quickly, we found out about PDP-8s, and eventually got one loaned to us. And then eventually, Data General Nova got loaned to us. So, it these companies making smaller computers that were very fascinating to us. Joining all the user groups. DEC had one called the DECUS User Group. Getting on every mailing list. In Datamation they had these bingo cards where you could check everything you were interested in. So, we just put our name down and checked everything in there and tried to learn about the world of computing.
DA: How did the faculty respond to your interest outside of your curriculum compared to your interest in your own studies?
BG: Well, I was relieved from some classes, Math in particular, because I'd read ahead. So, I had quite a bit of free time. So, when the Mother's Club which did this rummage sale, got the money for this Teletype and a certain amount of time to buy computer time, it was a question of who was going to figure this thing out? Now, I was very young. I was in eighth grade and some of the older students kind of barged in and thought they could figure it out. And very quickly, the teachers were intimidated. So, it was sort of a group of students reading the manuals and trying things out.
You would type the programs off-line on this yellow paper tape and then put it into the tape reader, dial up the computer, and very quickly feedin the paper tape and run your program. They charged you not only for the connect time, but also for storage units and CPU time. So, if you had a program that had a loop in it of some type you could spend a lot of money very quickly. And so we went through the money that the Mothers Club had given very rapidly. It was a little awkward for the teachers, because it was just students sitting there and zoom! -- the money was gone.
I wrote a tic-tac-toe program and a couple of other base conversion programs. It was the BASIC language running on this GE system. So, people didn't know what to think because teachers were fairly dignified in those days and usually were supposed to know what was going on. They were okay about it, but then when the money was gone, they had to start billing us for all of our usage. We had these kind of funny student checking accounts so my friends and I still stayed very active. We were kind of desperate to get free computer time one way or another.
The amount of time we'd spend in this particular room that had the Teletype was quite extreme. We sort of took over the room, myself and two other people. They called it the ÒTeletype RoomÓ. We were always coming up with schemes to get free computer time, and eventually did with a local company. Convinced them that because they had a deal with DEC for this big computer, an early PDP-10, serial number 36, that if they could find problems with it they wouldn't have to pay their rent. Having a few of the students, including me, bang on it and try to find bugs seemed like a good idea. And particularly, let us do that mostly at night. So, we were going down to this ... it was called Computer Center Corporation, C-Cubed, in the University District, staffed by some old people from the University of Washington Academic Computing Center had gone over there. So, for a few years that is where I spent my time. I'd skip out on athletics and go down to this computer center. We were moving ahead very rapidly: BASIC, FORTRAN, LISP, PDP-10 machine language, digging out the operating system listings from the trash and studying those. Really not just banging away to find bugs like monkeys[laughs], but actually studying the code to see what was wrong. The teachers thought we were quite unusual. And pretty quickly there were four of us who got more addicted, more involved, and understood it better than the others. And those were myself, Paul Allen, who later founded Microsoft with me, Ric Weiland, who actually worked at Microsoft in the early days, and Kent Evans, who was my closest friend, and most my age, was killed in a mountain climbing accident when I was in 11th grade in high school. So, the four of us became the Lakeside Programming Group. We were the hard-core users.
DA: Clearly, your extracurricular activity was probably more important in your later development than what you did in class, or at least equally important [Bill laughs]. How do you feel as we look at problems in education, that students that are coming up interested in technical things should balance those. Do you think it is important to explore things on your own at that age?
BG: Self-exploration is great, because you develop a sense of self-confidence and an identity of "Hey, I know this pretty well. I know this better than the teachers. Let me try and see if I can understand at the next level. Maybe I'm pretty good at this stuff." And particularly with the computer where if your program is wrong, you know you try it and if it doesn't work and then you fix it and try it again. It is kind of a feedback loop, which because the classroom has a lot of people, and maybe there is not a subject that you think you are good at or interested at. It is just fascinating to try and figure out the computer.
I remember at Computer Center Corporation they had hired in some of the great people of early computer days, including Bob Gruen, Dick Russell, a guy named Weir who was a Stanford guy. Anyway, these guys would kind of loan us deep manuals on the system, just for a few hours and then take them away. So, we'd spend those few hours just reading carefully. It was so exciting to get a little glimpse and beginning to figure out how computers were built, and why they were expensive. I certainly think that having some dimension, when you're young, that you feel a mastery of, versus the other people around you is a very positive thing. And for me that came in several ways: the reading I was doing non-computer related; in Math. But computers, timewise, for many years was a key center of excitement.
DA: You mentioned the PDP-10 as a computer that was important to you. In what ways do you think working with that particular machine set you up for the kind of developments that you did later?
BG: DEC always named their computers PDP, Programmable Data Processor. It is actually funny, because they kind of skip numbers. PDP-1 was their first. And it is kind of strange, I did a lot of work on the PDP-1, but not until I got to Harvard, late in my career. They had so few computers there, a couple of really decrepit PDP-1s hanging around were the best graphics display machines. Anyway, the PDP-10 which whose predecessor was the PDP-6 very similar and and later called the PDP-20 or DEC 20, and was, in a sense, the first time-sharing system. It was written, well, it was the first...I don't know how they said that? It was DEC's first time-sharing system, in any case. And it was a very good time-sharing system. That means that you could have lots of people working at the same time sharing the storages and the CPU.
It is kind of ludicrous today because the speed of that machine is so much less than these Pcs. [Bill gestures to PCs set up in interview room] To think that it was so expensive that we all had to share it and how slow things were. I mean, connecting up to these computers ... these Teletypes, the print head only moved at 110 baud, which is about ten characters per second. There was no lower case. And one day at this Computer Center they brought in a GE Terminate terminal. It was an absolute, incredible breakthrough, because it printed 30 characters per second. It was just incredible! [Bill imitates sounds of Teletype] We'd all just sit there and watch it. And even more fantastic was that it had lower case letters. So, you could do real correspondence and things like that.
PDP-10 today is considered kind of a strange machine because it was 36-bit with these 18-bit addresses. You used octal instead of instead of hex because having a word size that breaks into 18 by 18 that's not multiples of four. Anyway, DEC always used hex, because PDP-1 from the beginning was actually an 18-bit machine, although their later machines of great success were the PDP-11 was 16-bit and VAX and its successors were 32-bit machines. In any case, the PDP-10 was an exciting machine to be involved with because a lot of university campuses were getting these things and doing time-sharing. It was being used in a lot of new applications. And DEC was very much the up and coming company in computers. People were doing great peripherals to hook-up to these things. They were doing some awfully good system software.
The BASIC they did which we got ahold of the BASIC source code and enhanced t quite a bit was great. They had AID and FORTRAN. They didn't have a very good COBOL until a little bit later on. But it was a very solid time-sharing system. Lots of great experimentation going on with it.
DA: One last thing I wanted to ask you before we talk about the Altair. In addition to having this intense interest in computing, you maintained an interest in business in this early period at Lakeside and actually began a business. Would you talk a little bit about Traf-O-Data and some of the other entrepreneurial activities that you did?
BG: Well, there was the interest in the technology and also the business together. The two sort of went together. When we wanted to get free computer time, you had to have a sense of how you could motivate people to give you free computer time. With C-Cubed, that meant just finding bugs for them. Eventually, DEC made them pay for the machine. But we had been deemed useful enough by them, and although they didn't pay us, they gave us free time. That company went bankrupt. Then we found a company down in Portland, Oregon with the same PDP-10 that let us write a COBOL program, a payroll program, a huge complex payroll program. I learned about labor reports, taxes, and all sorts of mundane things. We called this group the "Lakeside Programming Group." And Paul really got interested in the machine. And Ric Weiland got interested in writing an Editor. So the two younger members of the team ended up doing most of the work on this payroll program.
In fact, they thought there wasn't enough work to go around, so they kicked me off. I said, "Look, if you want me to come back you have to let me be in charge. But this is a dangerous thing, because if you put me in charge this time, I'm going to want to be in charge forever after." Which in high school, when you are two years behind, it was considered a reasonably uppity thing. So, they brought me back in. And we got the payroll program done. We got a lot of free computer time. During all this time we were helping this school with its scheduling. It's kind of a long story, but they got it all screwed up. They used an approach that we had not recommended. And, eventually, they had to turn it over to us. So to be a student and being determining who's in what classes and when they meet. The school paid us pretty well. We actually used the computer time we had to do that. That worked out great. We bought some equipment from a bankrupt computer company, some DEC tapes and made money on that [laughs].
Traf-O-Data was taking road volume data and converting it into reports where you have actually just a 16-channel paper tape on the side of the road. The pressure sensitive hose that you drive over has a counter in there clicking out a count every five, ten, or fifteen minutes. Those have to be processed for the State Road Departments, to give out money for repairs, and decide how to do traffic lights, etc. Anyway, it was data that needed to be processed. So, we got involved in that.
We were truly naive in that we built a machine using the very first decent microprocessor, the 8008. I funded that development and wrote some of the software. And Paul Allen and another hardware person, Paul Gilbert, who knew how to do crazy wire wrapping, took these very tiny Intel memory chips -- I forget if they were 256-bit or 1K-bit, -- I think 1K-bit Intel chips in this 8008 and created a system and we did special software. 8008 wasn't capable of running a BASIC Interpreter. That had always been my Holy Grail because I had played around writing a little bit of a BASIC Interpreter on a PDP-8, and a Data General machine. But the 8008 is basically an 8-bit machine with no programmable stack. Doing this traffic analysis software was pushing the limits. Anyway, we were making machines and we thought we'd sell them to people. But, when the guy from the County that Seattle's in came to see it, it didn't work. We ended up being okay successful, not seriously successful [laughs], just by processing the tapes. At first that was a very manual process. Then we used this prototype machine that we built to do that. So, we made a little bit of money and had some fun with it.
I was definitely always pushing us out into those frontiers of "What should we do?" Even so, I never had this image that I'd end up being in computers. I didn't think computer people were mainstream or very interesting in certain ways. So, I took my first job where I took off part of my senior year in high school and worked for TRW, who was doing an awesome project using PDP-10s. Even then I was thinking, "Okay I'm going to go to college and do a normal career." In fact, it was very exciting when I was taking this time off, I got my college acceptances. So, I could just work hard on this. This was a real-time data project, controlling the power grid in the Northwest using PDP-10s. It had reliability requirements way beyond what the PDP-10 could deliver. So, we were really trying to push the state-of-the-art -- really pushing the state-of-the-art. It never met the full power industry requirements, but they did put the system on-line. And even at that point we'd thought, "Wow, this microprocessor is going to do something incredible.
As early as 1971, Paul and I had talked about the microprocessor. And it was really his insight that because of semi-conductor improvements, things would just keep getting better. I said to him, "Oh, exponential phenomena is pretty rare, pretty dramatic. Are you serious about this? Because this means, in effect, we can think of computing as free." It is a gross exaggeration, but it is probably the easiest way to understand what it means to cut cost like that. And Paul was quite convinced of that. So I would sort of say to Paul, "Well, you know what that means?" And he'd say, "Yeah, that is what it means." It is kind of fun to know this, and think, gosh, how are companies going to react, how are they going to respond to something that phenomenal? The early days were very slow moving, though. By the time I went to Harvard, all there was was the 8008 chip. And the 8080 was just coming out, which was the first good general purpose microprocessor chip that Intel was coming out with.
DA: We are going to talk a little bit about your transition into Harvard before you got to the Altair. You mentioned that even though you worked in computing, that it wasn't your goal when you went to college. Do you want to say what your goal was?
BG: That's right. I finished up at TRW, went back, and graduated from Lakeside School. I picked, out of the schools I'd been accepted to, to go back to Harvard. They seemed to have a lot of different things. I knew that if I wanted to be a Lawyer or a Mathematician, Harvard had good courses for these things. Once I got there, I thought Economics was pretty interesting. And I felt that I understood computers well enough, that I really didn't need to hang out with a computer crowd there, because they weren't as interesting. I did end up taking a few computer courses. But most of what I did was not related to computers. And meanwhile, Paul Allen, who had worked with me on everything, basically[chuckles], and who shared this idea that we should go do a company -- he actually tried to convince me after TRW that we should start a company then, and try to build PDP-8-like systems around 8080 chips. But it just was too vague and my parents wanted me to go back to school.
So, I went back there. But Paul was there and we were always talking about, "Could we stick a lot of microprocessors together to do something powerful? Could we do a 360 emulator using micro controllers? Could we do a time-sharing system where lots of people could dial-in and get consumer information?" A lot of different ideas.
But a major milestone for us was when we were walking through Harvard Square, one time, and saw this Popular Electronics magazine. And it was kind of in a way, good news and bad news. Here was someone making a computer around this chip in exactly the way that Paul had talked to me, and we'd thought about what kind of software could be done for it, and it was happening without us. And for all we knew maybe they had some software people, they were just going to go charge off and do this thing.
So, we wrote this company immediately. Sent them a letter. We have a copy of that somewhere. But anyway, a letter on Traf-O-Data's stationary, because it was the only stationery we had. We offered to do a BASIC for them. And they thought that was interesting. They called back and said, "Well, you're serious? We have a lot of strange people calling us."
This article received immense interest. I mean the idea of a kit computer -- even though there was really nothing you could do with it. There was no Teletype hook-up in the early days, there was no software for it. All you could do was use these switches, key things in into this front panel and maybe do a little program that does things in the lights. Or, actually, a guy name Steve Dompier discovered it, because this bus is unterminated, if you are very clever about the program you run, you can get high-frequency emission that can cause a radio to make interesting noises. Now, eventually, we did get controllers for Teletypes and cassette tapes and floppy disks, that kind of thing. But, in the early days it was pretty useless. People just bought it thinking that it would be neat to build a computer.
DA: I want to hone in on this idea of your proposing that you would actually write BASIC for this machine. It is kind of a gutsy thing to do. Did you feel about it as being boastful, or did you really think you could deliver? Did you think they'd take you up on the offer?
BG: Well, I had no doubt that I could write a BASIC Interpreter. I thought through in my head all the things that I hadn't done before on those mini-computers. Doing things really small, fascinated me. These machines, you could actually buy it with no memory card. After we got there a lot of people were calling up asking, "What do they do with it?" Well, if you don't buy a memory card you can't do anything. But, the memory cards were 1K. So, if you bought four of those you could have a 4K machine. 4K bytes. And I thought I could do a pretty decent BASIC. Fitting the BASIC in, allowing you to have both your program and your data storage in 4K bytes. That was going to be hard. But, it was a fun challenge.
People had done 8K BASICs on the PDP-8. But this was a much better instruction set. I had some ideas on how to do things a little bit in a new way. There was no doubt in my mind we could write a BASIC. I was fairly self-confident in those days. We didn't know how long it would take us. And it was kind of funny because we were sort of acting like we had it already. We went to work day and night. Paul first worked on the simulation software. He took the Macro 10 Assembler and defined macro, so we could just type in sort of a form of 8080 code. Then he modified the DDT-10, the symbolic debugger that was on the 10, to understand these instructions. He then wrote a simulator to simulate these instructions.
It was a reasonably simple instruction set. Paul was very good with the PDP-10 Assembler. I, in the meantime, laid out the design and charged off coding the BASIC. Paul later came in and helped out with that. A third person, Monte Davidoff, sat down for lunch with us and said he knew floating point packages. So, we had him write some of the math routines. And then we just kept squeezing it. So, we wrote without ever seeing this machine[pats the Altair], except in this picture, and the simulator and got the BASIC running. And then we called them back and said, "By the way, what's the sub-routines for reading a character from the Teletype and writing to the Teletype -- how do you do that?" And we got Bill Yates on the phone, who was the co-author of this article. And he said, "Well, that is pretty interesting. All these other guys call us up and say they are going to do things. But nobody ever asked us how you get data in and out of the machine. You guys sound pretty serious. You ought to come out and show it to us." And, because we'd never had the chip, just the book from Intel, if we had made any mistake in terms of how the instructions worked, the thing never would have run.
And so Paul was scheduled to fly out to Albuquerque. He decided to go get some sleep. I stayed up all night reading the book to see if we'd miscoded some of the instructions. And finally, decided it was all okay, punch out the paper tape, and made sure Paul got that before he went off on his plane. He wrote the bootstrap loader, that is the thing you have to key in to make this computer smart enough to know to go get data off the Teletype to read it into memory. He wrote that on the plane on the way out. It was actually 46 bytes, the first one. I eventually wrote in 17 bytes.
He took the BASIC to MITS. They had a machine they had run with 6K of memory, which for them was a big, big thing. And loaded up the paper tape. The first time, for some reason it didn't work. The second time they loaded it in and it worked. Of course, the simulator is very slow because you go through lots of instructions to a single instruction. So, actually, the real machine[pats the Altair], even though it is such a simple little microprocessor, was faster than our PDP-10 simulator. About five times faster. And so to Paul, when it finally came up and said, OK ... Actually that first version said READY. Most BASICs when they are ready, say READY. Later when I was squeezing bytes out, I thought, well it is faster to print OK, and it is kind of a nice friendly word. So I shortened it to OK a little later.
Anyway, it came up, it said Ready, and he typed in a program, Print 2 + 2, and it worked. He had it print out squares, sums and things like that. He and Roberts, the head of this company, sat there and they were amazed that this thing worked. Paul was amazed that our part had worked, and Ed was amazed that his hardware worked, and here it was doing something even useful. And Paul called me up and it was very, very exciting.
Pretty quickly we decided that we ought to get out there and really help these guys get their act together. I never became an employee. Paul was their Vice President of Software. But I moved out and whatever I did from the inside, I did on behalf of Microsoft. I got out there and alot of what I started doing at first was actually enhancing the BASIC. 537
DA: Let me ask this Bill. You mentioned that, even before this, you and Paul had had many discussions about the future. How did this work affect what you thought the future was going to hold?
BG: Well, Paul had talked about the microprocessor and where that would go and so we had formulated this idea that everybody would have kind of a computer as a tool somehow. Not just for business, but also for something they would play around with as a home device. We knew that however it got started, that there would be certain standards built-up around it, about how you programmed things. We wanted to be part of that excitement. And so we saw this machine as just the beginning of an era. And this company was a wild company. I mean they were actually bankrupt before they did this because they had gotten screwed up doing Kit Calculators which had been their thing they had done after model rocketry.
MITS actually stands for "Micro Instrumentation Telemetry Systems", funny little things you stick on top of the rocket that tells you what the temperature is at the top of the flight or eventually, they had ones that would take pictures. So, they had done okay in that and then got into Kit Calculators. But was wiped out by Bomar and TI. And then just as a desperate thing, they did Kit Computers. When these computers came out at $360, the price of the 8080 chip was $360. So people kept saying, "They must be broken chips, it must be fake." And, of course, when they put these kits together, they didn't preassemble them, so if you miss one part -- a lot of people had a hard time putting these things together. But, a lot of people got it done and eventually went on to buy the Teletype and BASIC, and actually get a running system. So we thought, "Hey, are we really on to something here? We think so." And MITS was just great because it was just a center of activity for those first few years. We went around the country in this big van, big blue van, they had, with these machines starting up user groups and demonstrating things. Actually, before we even shipped BASIC, somebody stole the demo copy out of the van and started copying it around and sending it to different computer clubs. There was a real phenomenon taking place there, right around this Altair computer. In fact, the MITS guys were kind of upset when people would imitate this computer, same plug-in bus for peripherals -- things like that. They really weren't sure what to do about it.
DA: How did your development on this lead you and Paul to setup your own company as opposed to just working for MITS?
BG: Well, we knew that MITS was only one company, and we wanted our software to be used on all the machines. And even the original deal we did with MITS talked about our ability to get paid for licenses to other companies. We saw that as Intel was promoting their chip to intelligent terminal makers and other computer makers, that instead of that company writing their own BASIC, we could sell our own BASIC to them for a lot less money. In fact, just do it on a royalty basis. And so we went around convincing companies like NCR and a lot of the terminal companies that they should make microprocessor-based machines. And so, I was never part of MITS. Paul worked there for about eighteen months and he hired someone else in to take over their software department. And I started hiring other people. In fact, before Paul came back, we had started BASIC for 6800s, 6502s -- other chips. We started the FORTRAN compiler. We were talking with Texas Instruments about doing a BASIC for them. It was kind of complicated at first because, actually, I went back to Harvard for a little bit, and we hired in Ric Weiland, one of our high school friends, and Marc McDonald, another high school friend to sort of be the core group until both Paul and I got there full time.
DA: So, you were convinced that you should setup your company to deal with a variety of different computer vendors?
BG: We had Microsoft as a separate company. In a certain sense, if things hadn't worked out, I could always go back to school. I was officially on leave. I didn't have a family to feed or anything. But I was doing the payroll, writing the taxes, doing the contracts, figuring out how to price the software. In fact, I was business-oriented enough that I wrote a letter about software piracy, sort of complaining that a lot of these computer groups weren't paying for their software. That really became a cause celebre at the time: ÒIs it fair that this guy is asking for money? Should we pay for this stuff?Ó MITS was very controversial because some of the memory boards they had been shipping didn't work. They'd been late with a lot of things. So, some people felt like it was a way of getting back at MITS to take the BASIC.
We had the first computer convention. Their people came in. So, Microsoft was a business from the beginning. Not that we had any clear view that it would ever be a large business, but I had to pay these friends that I had hired. At a minimum, I had to make enough money to write their paycheck, and if I got enough confidence that we could sell a lot more, then I would be able to hire even more people to get ahead, to be the leader in doing lots of products that could share code with each other, and take the market.
DA: Bill, let's talk a little bit about the people that formed the early Microsoft.
BG: Paul and I were the founders. During the time we were in Albuquerque, which was 1975 to 1978, we ended up with about sixteen people. This is a picture we took towards the end of that time [Bill refers to the group photo taken in Albuquerque], myself and Paul. This is Gordon Letwin, who had worked and did the Heath BASIC, Benton/Harver BASIC. Then he was upset when they were licensing my BASIC. So, he came to work for us and did some incredible work. Marc McDonald was actually our first employee. Other than Andrea, who wrote the manuals, and Marla, who helped keep the books. I was the Sales Department, Contract Department. Everybody else here were programmers. We all wrote an immense amount of code. These were exciting years. The number of new machines coming out were pretty dramatic.
Our offices were here in fancy Albuquerque, up on the eighth floor of this building here. Albuquerque was great. There weren't many distractions there, but it was hard to recruit people as we tried to grow.
DA: What was the culture of the company like?
BG: Well, I would program sort of night and day, and tell people, "Hey, we promised this thing to be done in a few months we've got to get these things done." We were so aggressive at just getting things done. Like committing to write a ROM BASIC that would fit into 12K of ROM. It was fun because, I at that time, got to look over all the code that people did, and talk to people about where we would go with things. It was just a very small group, and yet between the new machines being done in Japan and the U.S., every week something new was happening.
DA: Did the other people share your intention? Were they there as many hours as you were?
BG: Well, certainly most of the people did. And we were all quite young. I may have set the most extreme example. But, the work was really fun. We always had deadlines that we ended up committing to that ended up being very challenging.
DA: Bill, you skipped quickly through a notion of change and strategy in your corporation. First you started with languages and then you started branching out. Can you talk a little bit about the thinking and talking that you and Paul and the others did about what strategy Microsoft as a company should have?
BG: We always knew that we didn't want to have a single product that was a dominant product. We wanted to hire in more software people and have a full product line. In a sense, one of the earliest things we decided to do was to make available on the microprocessor everything that had been available on the mini computer. And that is why we did the languages, COBOL, Assembler, all the normal tools that you would expect to be able to do with native software development. But, it was clear that as an individual machine there were some things that you would use that you didn't need on a mini computer or mainframe.
And already there were other software companies, although, we had been the very first micro computer software company. A company called WordStar had emerged. One of the marketing people from IMSAI, after IMSAI wasn't doing so well, went out and focused that company around the WordStar word processor. Actually, the company was originally called MicroPro. And Seymour Rubinstein ran that. There was Michael Shrayer with Electric Pencil. And we had come out with games very early on. Here is the so called, Adventure, game running here on this TRS-80. This is an early box that we used in our packaging. We called it, that group, Microsoft Consumer Products, at the time.
One of the products that really got us kicked-off in doing new things, was we made a card that plugged into the Apple II with the little Z-80, a microprocessor that succeeded the 8080 on it. So, it let you run all of the business applications that were coming out in this CP/M-80 world, on this machine which was very high-volume. That was a big success and let us grow our retail group, and even go out and license some products like Flight Simulator and many others that defined a whole new avenue for us.
We never saw ourselves as limited, as in terms of what kind of software we wanted to do. As long as it was software where development talent was the key to doing it well. And that it could be sold in fairly high volumes, which in those days weren't nearly what they are today. We decided that might be a good product for Microsoft.
DA: Do you feel like you saw the movement towards the business market out of the hottest market soon enough?
BG: Well, the key to the move to the business market was getting a machine with more capability, and getting a standard, although you could exchange some basic programs between these 8-bit machines. If you went and used any of the advanced features then you were just tied to that one machine. So, it wasn't all that economical to write lots of software for these machines. And the 8-bit machines maxed out at 64K of memory. And even though I wrote BASIC in 4K, 64K seemed like a lot, but as we started taking on more and more challenges, it just wasn't going to be enough. And since we were tracking what Intel was doing very closely, in building the next generation chip, their 8086 family, including the very low-cost part called the 8088, we knew that 16-bit computing was on its way. We saw that it could be a good business machine and we decided to focus a lot of early work on that Intel chip.
In fact, it was that decision that forced us to do the SoftCard, because we had so many products for the Intel chip, and the question was, "Should we spread those products over to other 8-bit chips, like the 6502 that runs in here? Or, should we immediately move up and do 16-bit software?" And I said, "No. We are going to do 16-bit software." Everybody was a little bit disappointed because it meant that we wouldn't be able to sell onto these machines. That is when Paul invented the idea of the SoftCard, so that we could actually take our Intel software and run it on this machine, and, at the same time go ahead and devote our resources to being way ahead of everybody else in developing software for the 8086.
DA: You mentioned that you were tracking the developments throughout the hardware side of the industry. How easy was it to get information on what was coming available? Were people open in those days? Or were they pretty secretive?
BG: Well, there was no secrecy at all, at least as far as I could detect. Everybody in the industry would be at shows like the West Coast Computer Fair. And there was so much to do -- we were overlapping each other some. There was some good rivalry, but not in a sense that people were keeping lots of secrets about what they were up to. It was a very exciting business at that time.
Intel was a customer for our BASIC. They came out and asked us to do some custom work. I remember telling them that I could do it in two weeks. And they said, "Don't say that, don't say that -- say four months -- say something reasonable." And it turned out that it took four weeks to do, because configuring their system was so hard. But we'd gotten to know Intel. And we were talking about where the chips were going. It was a very small group that sort of shared this secret. In fact, Ted Nelson gave a speech at one of the West Coast Computer Faires about how we were going to overthrow all the big computer companies, and we really knew that it was Òpower to the individualÓ. There was a little bit of a minority feel, that we had to advance this cause. And, eventually everybody would realize that we were right about what was going on with these machines.
DA: Was that shared by the people at Microsoft?
BG: Oh, absolutely. Microsoft at this time, I think our average age was 22 or 23 years old. People enjoyed the programming. Some of the people didn't ever go off to see customers. They just stayed and did the work. But, it was a very small group. And when I came back from a trip, I'd always talk about what I'd been up to and what we were seeing out there in the marketplace.
DA: Talk a little bit about how your company grew through this period as you started moving around into the business applications, different machines, you added employees. How did that work?
BG: We were in Albuquerque until the end of 1978. And that takes us up to where we really completed all the languages we wanted to do in most of our 8-bit software work. So, as we were moving up to Seattle in 1979, we had some custom extensions to do for some Japanese machines of that time, like a NEC machine and an OKI machine. But, a lot of our resource was already focused on 8086 development software. We just saw that as the coming thing. But moving to Seattle let us expand our personnel quite a bit. That is when the Multiplan, the spreadsheet development started. That is when Microsoft Word started. In particular, we hired a number of key people like Charles Simonyi, who had been a founder of the Xerox Palo Alto research labs, and had shown us the Alto computer and talked to us about graphical interface. We shared a common view that low-cost microprocessors would be doing that, and got him on board to help us write applications that would eventually become very graphical applications.
So, when I moved from Albuquerque in the very, very beginning of 1979, there were the sixteen people. Then, about a year after that, I hired a friend of mine from college, Steve Ballmer, who is very good at hiring people. He could see that we had more projects that we wanted to do than we could. He was able to almost double the size of the company and people every year for the next five years. So, it really started to change in character where I had written the high percentage of the code myself until we got to Seattle, and reviewed everything that people were doing to the point where we were setting up a lot of autonomous teams, and having to do a lot more in terms of what was our methodology, and how did we interview people. Just to stay up with all the projects we were going after.
DA: We talked a lot about some of your earlier successes. What were some of the early things that didn't go well? And what did you learn from them?
BG: There were a lot of mis-steps in the early days, but because we got in early we got to make more mistakes than other people. I had customers who went bankrupt and didn't pay us. Customers who we spent a lot of time with who never built microcomputer-based machines.
I worked for a long time on an APL Interpreter and I almost got that done, but then it looked like it wasn't going to have much of a market and I was too busy doing other things. We actually never shipped an APL that we had talked to people, that we were working on.
There was another interpretive language called FOCAL that we'd written a version of for the 8080 and 6502. Having two interpretive languages like that was not a good approach. That was a dead-end project. Everything else, COBOL, FORTRAN, the way we selected the various chips. A big project we did for Texas Instruments where we wrote a product for their machines which eventually, they failed in the personal computer market, but they shipped a lot of machines in the meantime.
Multiplan, targeting the 8-bit machines instead of just relying on the next generation to come, the IBM PC generation, that was a huge error. When we talk about, "Are we aiming too low, in terms of system requirements, we often think, is this another case like Multiplan?" Because it was a great product, but it was the basic strategy that was wrong. And, in fact, to some degree that allowed me to make one of the best decisions I ever did, which was later, when we had to compete with 1-2-3. There was a question of whether to do it in the character-mode environment, or whether to move up to the next generation, which was graphical. And we said, "Okay, we'll let them dominate the DOS-character world. We are going after Mac and Windows. We are going to be a generation ahead." And that worked out very well. Multiplan was certainly an experience that was helpful there.
In Retail Marketing, we made a number of mistakes that were important for us to learn from. We had in a few countries, agents. And you really don't want to use agents. You want to have your own people. If you are going to be a serious company, take a long-term approach. You should hire people in all the countries you are going to be in and make sure they are there cementing long-term relationships -- not just generating short-term commissions. I think we learned that one pretty quickly. We did hire in some very sharp business people, and got them to share their experience so it wasn't just us technical guys and the other people. We were very young. I mean, Steve and I were kind of driving the business and Paul and I were driving the technology. We were optimistic in thinking we could get things done sometimes faster than what we did. The project of the moment always seemed very exciting. And some of them never generated much in the way of royalties. But all correctable stuff as long as we sort of wake up and see what the results were.
DA: Is there anything else you want to add?
BG: I'd say that my job, throughout all this, has been, I think, the most fun job I can imagine having. And partly the people I've gotten to work with outside the company. Certainly there are great people inside the company. And certainly, for at least a decade or [laughs], that will just continue to be the case.
DA: It has been a terrific pleasure. You've worked very hard and I thank you so much for your help.
BG: Sure. Someday I will be glad I did it.
For more details Refer this site:
http://americanhistory.si.edu/collections/comphist/gates.htm#tc1
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